Can't Afford Solar Panels? Lease Them

Who wouldn't be interested in saving the earth while saving money on utilities these days? Few of us, however, consider installing solar panel systems because the return on a $20,000 to $50,000 investment is so far down the road. Even after tax rebates, it takes years for that investment to pay off in locally generated electricity.

As a result, the American solar industry has never really taken off...until now. Several years ago, three photovoltaic companies got together and came up with a plan to offer leasing programs so homeowners could begin receiving savings almost immediately.

Primary rental companies
Three primary companies presently offer leasing programs:
Citizenrē has received the bulk of attention among solar leasing companies as Citizenrē REnU was the first available program in the United States.
freEner-g is a Minnesota-based program, initially developed to serve the Minneapolis/St. Paul Area.
SolarCity serves portions of Arizona, California and Oregon

How it works
Not every home design is suitable for solar panels, so the leasing company first must evaluate your particular home. If they find your home will work, you pay a deposit (frequently $500) and sign a lease for anywhere between one to 25 years. The company files all the necessary permits and design the system appropriate for you. They then purchase and installs the system.

After installation
The leasing company continues to own and operate the panels throughout your lease. If you move, the panels can move with you. 

You pay a fixed monthly electricity rate throughout the lease. According to SolarCity, a typical home with a 2.8-kilowatt system and a $150/month electric bill would end up with a $60/month bill plus an $80 or $90 monthly lease payment. Others could save much more. Kathly Nalty, who was featured on the CBS Evening News, owns a typical suburban home she shares with kids, a grandmother, five televisions and four computers. Her average electric bill went from $200-$300/month to $59/month. The solar-panel company charges her $100/month for her 15-year lease

Some utility companies even allow you to sell back excess power generated by your solar panels, when they produce more power than your house requires. This process is known as net-metering.

How they make money
The leasing companies obviously make money on deposits and monthly fees, but the bulk of their profits come from generous state and federal solar rebates, worth a couple thousand dollars per system. The advantage is that they understand the complex network of rebates required to turn a profit.

Photo by Chandra Marsono